Wednesday, February 11, 2015

Holdouts say there are no negotiations with gov’t

Interior and Transport Minister Florencio Randazzo gives a press conference at Government House, where he pushed back against ATFA’s report yesterday.

Lobbyists for ‘vulture’ funds release report detailing gov’t officials’ wealth increase

More than a month after the Rights Upon Future Offers (RUFO) clause expired, negotiations between the federal government and the “vulture” funds are nonexistent, the American Task Force Argentina (ATFA) said yesterday.

ATFA leaders made the revelation as they unveiled what they claimed showed inexplicable wealth increases of federal government officials.

“Our members have tried repeatedly to negotiate with representatives of Argentina but have been rebuffed. There were some reports that the government was talking to Elliott Management but that’s not the case,” ATFA co-chair Robert Shapiro said to a question posed by the Herald during a teleconference.

“We continue to welcome the arbitrators efforts and hope the government will choose to negotiate,” Shapiro added.

ATFA, the lobby group representing the interests of holdout creditors, including Elliott Management and Aurelius Management, said the “vulture” funds are willing to negotiate with the federal government but no progress has been made thus far. The ATFA refused to reveal data about the effort by the holdouts to seek Argentine assets abroad that could be used to pay what they say they are owed by the government.

It’s an “ongoing process” and “courts and attorneys are dealing with that,” Shapiro said.

“The government claims it has resisted the rule of law in the United States and in institutions to protect the interests of the Argentine people. Our report demonstrates that’s a lie. Argentina’s default is voluntary. The economic conditions of people have deteriorated and the ones of government officials haven’t,” Shapiro said. “Corruption is something we see today in Argentina.”

Replying to ATFA’s statements, Economy Minister Axel Kicillof said the federal government won’t pay the holdout funds what they are calling for and added that nothing has changed despite the expiration of the RUFO clause. He described ATFA as an NGO whose main purpose is to “harass” Argentina but said their strategy will end in failure.

“The ‘vulture’ funds spend a lot of money in ATFA, a task force that harasses the country and federal government officials with a mob behaviour. They are saying that they will stop criticizing us only when we pay them. But their strategy won’t work,” Kicillof said. “We won’t graciously mortgage the country, they did that in the 1990’ and the country went bankrupt because of that.”

Mark Brodsky, chairman of Aurelius Capital Management, another hedge fund involved in the litigation against Argentina, said the government’s unwillingness to cooperate with the holdouts is putting the economy at risk.

“Like the Roman Emperor Nero and his fiddling, Mr. Kicillof seems so preoccupied with speechmaking that he makes no effort to prevent a serious problem from getting much worse,” Brodsky said. “While Mr. Kicillof ‘fiddles’ with political gamesmanship, the hold-out debt grows by about US$500 million per year, borrowing costs throughout the country are greatly elevated, and the economy spirals into recession.”

Wealth report

The lobby group unveiled yesterday a report called “Argentina Government Official Wealth Report” that looks into the declared wealth of 14 government officials serving during the Fernández de Kirchner administration such as Interior and Transport Minister Florencio Randazzo, Security Secretary Sergio Berni, Health Minister Juan Luis Manzur, Tourism Minister Carlos Meyer and former Trade secretary Guillermo Moreno.

Each of the government’s personal net worth showed “dramatic and often unexplained increases, raising questions about that enrichment,” according to ATFA. The lobby group said it detected “a pattern of corruption” in Argentina and that the release of the report “has nothing to do” with their quest for a full payment by Argentina.

ATFA’s report is part of a strategy that has included increasingly aggressive public information campaigns against federal government officials. As representatives for the most recalcitrant of bondholders, ATFA has made it a point to win over decision-makers in the political, judicial and economic spheres of the United States. They spent last year US$1.06 million on lobbying actions against Argentina, four percent more than in 2013.

“Our coalition includes holdouts to push Argentina to negotiate. We have consistently said the government needs to negotiate as they have the ability to do so. The report has nothing to do with the payment but shows a pattern in Argentina. The economy is going down the tank and people would be much better off with another government,” ATFA co-chair Nancy Soderberg said yesterday.

Shapiro was an adviser to Bill Clinton’s 1992 presidential campaign and a senior adviser to Al Gore’s 2000 run for the White House. Soderberg, who served as a senior foreign policy adviser to Senator Edward Kennedy, was also a member of Clinton’s National Security Council and an alternative representative to the UN with the title of ambassador. She is currently a Democratic Party activist in Florida, a member of the Council on Foreign Relations and the chair of the Public Interest Declassification Board (PIDB).

Herald with DyN, Télam